Upbeat Consumer Report Expected

U.S. consumer confidence is rising as fears about terrorism fade, preventing a collapse in spending and suggesting the first recession in a decade will be short-lived, reports this week are expected to show.

Confidence as measured by the University of Michigan, coming Friday, is forecast to rise in December for a third straight month.

The Commerce Department will release Friday its report on November personal spending and income. Consumer spending accounts for two-thirds of the economy.

But the economy has a lot of ground to cover before it returns to its peak performance. The final revision of third-quarter gross domestic product on Friday is expected to show a 1.1% annual rate of contraction as business spending slumped and firms slashed inventories.

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Other economic reports this week:

* Tuesday, the Commerce Department will report on housing starts for November.

* Wednesday, the Conference Board will issue its U.S. index of leading economic indicators for November.

* Wednesday, the Commerce Department will report on the U.S. trade deficit.

* Thursday, the Federal Reserve Bank of Philadelphia will issue its manufacturing index for November, which is expected to show that the region’s factories are making progress digging out of a yearlong slump.

Bloomberg News